It’s no secret that dairy farms are fewer in number than they were decades ago. What drives a farmer to make the decision to get out of farming? What factors contribute to this resolution? At the Dairy Innovation Hub’s recent Dairy Symposium event held in Madison, Wis., University of Wisconsin-Madison ag economist Jeremy Foltz gave insight as to why farmers are exiting the industry.

Since 2003, Wisconsin has lost 50% of its farms but has remained stable in cow numbers, sitting at about 1.3 million head. Based upon this data, Foltz wanted to answer the questions, “What determines a farm’s exit? How can we predict it?” Using ArcGIS geographic data to localize farms from the list of licensed dairy milk producers, Foltz received feedback from 706 respondents. Variables such as age of the farmer, size of farm, number of cows, productivity, type of business, and whether the farm utilized grazing practices were recorded.

From the data collected, it was concluded that age does influence the exit of dairy farms from the industry. This directly correlates to the recent 2022 USDA Census, where the average age of the U.S farmer is currently 57.5 years old, up 1.2 years from the 2012 census. In Foltz’s study, as farmers aged from 50 to 60 years old, that increased the likelihood of exiting the industry by nearly 8%. Research found that older farmers with smaller, less productive herds were more likely to exit the dairy industry.

Geographically, Foltz wanted to uncover whether dairy farmers exited farming based upon what part of the state they were located in. Statistically, it was determined that there was no geographic pattern. Small and large farms exited at a similar rate, proving that the decision to get out of dairy farming wasn’t dependent upon farm size. It was also determined that grazing and business type did not have any effect on a producer’s decision to leave the industry. “How you organize your business made no difference,” noted Foltz.

Of all the factors that were thought to influence a dairy farmer’s decision to exit, it was proven that the majority of them had no correlation. Other challenges such as the amount of capital needed to start farming makes it a bit more difficult for people to get involved in the industry, noted Foltz. Although we have fewer farms throughout the state of Wisconsin and across the country, productivity per cow continues to rise. We truly are doing more with less when it comes to the dairy industry.

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(c) Hoard's Dairyman Intel 2024
May 23, 2024
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